DeBartolo Guilty of Felony / $1 million fine, 2 years of probation

David Dietz, Howard Arceneaux, Chronicle Staff Writers

Published 4:00 am, Wednesday, October 7, 1998

1998-10-07 04:00:00 PDT Baton Rouge -- His head bowed and speaking in a subdued voice, San Francisco 49ers owner Eddie DeBartolo Jr. pleaded guilty in federal court yesterday to a felony charge of failing to report that Louisiana's former governor allegedly extorted $400,000 from him to win a casino license.

With the plea, DeBartolo avoided prison. But he agreed to pay $1 million in penalties, serve two years of probation and testify in future trials against ex-Governor Edwin Edwards and his son, Stephen, key targets in a federal probe into the state's gambling industry.

In testimony leading to DeBartolo's admission, FBI agent Jeffrey Santini described an alleged two- year courtship in which DeBartolo at first resisted but then finally agreed last year to pay Edwards the money -- in crisp $100 bills -- to help him win the final riverboat license to be awarded by the state's gaming commission.

DeBartolo got the license but later withdrew from the project when he was subpoenaed to testify before a grand jury investigating the deal.

Speaking quietly and cordially, DeBartolo stood before U.S. District Court Judge John Parker and admitted his guilt to the charge, formally known as misprision of a felony -- knowing about a crime and not reporting it.

"Mr. DeBartolo, how do you plead?" Parker asked.

"Guilty, your honor," DeBartolo said.

Sitting three rows back in the courtroom, Edwards and his son watched stoically.

Afterward, DeBartolo asserted that he had been victimized by Edwards, who was a longtime friend of the DeBartolo family. He described the courtroom experience as a "little piece of hell."

"I am just very grateful we're in the position we are now," he said.

DeBartolo's plea did nothing immediately to resolve his limbo status with the 49ers, nor did it lend any new impetus to the team's plan to build a $325 million stadium and mall project at Candlestick Point.

DeBartolo resigned as team president last year after word of the Louisiana investigation became public. But he wants to return in full charge by buying out his sister, Denise DeBartolo York, who is co-owner of the franchise.

"I'm going to start the process of getting my football team back," he said.

In his testimony, FBI agent Santini said that Edwards first approached DeBartolo in 1994, shortly after the death of DeBartolo's father, and said he wanted a "business" relationship with the 49ers' owner.

When DeBartolo Entertainment Co. and a partner, Hollywood Casino Corp., applied for the final riverboat license, Edwards offered to help DeBartolo, according to Santini.

In late 1996, Edwards was allegedly overheard by federal agents telling DeBartolo in a telephone call, "I want to make sure before we go through all this that we . . . still have the votes on the commission to get the license. . . . In the meantime, I'm . . . talking to a friend of mine on the commission to ask him to feel out to see."

Santini said that an unidentified DeBartolo Entertainment official tried repeatedly to warn DeBartolo not to do business with Edwards. While at first backing off, according to Santini, DeBartolo agreed in the bar of a Baton Rouge hotel on March 5, 1997, to turn over the $400,000 as a vote on his license application loomed.

"During the course of the meeting," a government affidavit said, "Edwin Edwards showed DeBartolo a piece of paper upon which he (Edwards) had written the figure, '$400,000,' and told him he needed the money before the vote, and if he did not receive it there could be problems with the application."

The government secretly recorded the meeting, as it did another on March 24 when Edwards met with an unidentified former public official in Edwards' office to turn over the money.

Edwards, according to government allegations, told the former official to "make sure that everybody involved is careful about how that's passed out" because an investigation had begun.

Santini said that besides the $400,000, Edwards had wanted DeBartolo to pay him consulting fees of $50,000 a month, as well as a fee for each person who gambled at the riverboat.

After the court proceeding, the dapper, droll Edwards rejected the government's recorded conversations as distortions and said he will be proved innocent.

"I will suggest to you that for anyone to assume that I, a year after I was out of the governor's office, was in a position to do damage to this man . . . is certainly a giant leap from any kind of logic."

He said he had no ill will toward DeBartolo but then deadpanned, "I hope the 49ers lose on Sunday" when they play New Orleans.

Under the agreement with the government, DeBartolo's $1 million penalty was paid at once. Of the sum, $350,000 is intended as restitution for any victims of the alleged fraud.

In a statement, National Football League Commissioner Paul Tagliabue said he has asked DeBartolo to remain in limbo until the league can review DeBartolo's plea and "related matters" before deciding whether he can regain control of the 49ers.

"Mr. DeBartolo's decision to enter a plea in Louisiana is not based on any understandings with or commitments from this office regarding his future status with the 49ers or the NFL," Tagliabue said.

York issued a statement that gave no indication that she plans to relinquish her share of the team.

While acknowledging her brother's legal problems, York said the 49ers have "strong management" that remains committed to the team's success.

At a news conference before DeBartolo entered his plea, Mayor Willie Brown would not discuss DeBartolo's legal troubles but insisted that the 49ers' stadium-mall project is on track.

"I have no knowledge of the situation in New Orleans at all," he said.

Two weeks ago, Brown met with 49ers' President Larry Thrailkill after Thrailkill suggested that the project could be thwarted by escalating costs.

At that time, Brown said Thrailkill would quickly send the city detailed information from the team's stadium consultants. Brown said yesterday he still does not have the material.

Despite that, Brown said the city and the 49ers have been meeting on the stadium issue, discussing ways to bring down costs.

Thrailkill estimated that costs had ballooned to $500 million. After meeting with Brown, however, he vowed to build a stadium for $325 million, with the city's cooperation.

The Mills Corp., the Virginia developer that wants to build a huge shopping and entertainment complex next door to the 49ers' planned stadium, was pleased by the plea.

"The Mills Corp. remains fully committed to building Candlestick Mills as an integral part of the new 49ers stadium," said a statement from Mills group vice president Edward Vinson.

"We are pleased to know that Eddie DeBartolo is resolving his legal issues, and we hope that today's decision opens a door that will enable all parties to the development to proceed on a fast-track basis."

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